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10pc VAT rebate scheme on e-payments from today

10pc VAT rebate scheme on e-payments from today

By Himalayan News Service

Internal Revenue Department. Photo: ird.gov.np

Kathmandu, February 10 The government’s earlier decision to provide consumers with rebate of 10 per cent of value added tax (VAT) while making purchases through electronic devices will come into effect from Tuesday. The government had prepared and endorsed the working procedure of this programme announced in the budget for 2019-20. As necessary groundwork has been completed, the scheme will be implemented from Tuesday, as per Binod Bahadur Kunwar, director general of the Inland Revenue Department (IRD). Implementation of this scheme will make sellers mandatorily return 10 per cent of the VAT amount to bank accounts of respective consumers who purchase goods through electronic mechanism using debit/credit card, mobile money or other forms of digital payment systems. For example, a person making purchase of Rs 1,000 will have to pay 13 per cent or Rs 130 as VAT. Following implementation of this scheme, 10 per cent of Rs 130 or Rs 13 will be rebated in the bank account of the consumer. Meanwhile, the 10 per cent VAT rebate scheme is applicable for purchases made through electronic means from Rs 1,000 to Rs 100,000 only, as per Kunwar. The government has introduced the VAT rebate scheme on electronic payments to discourage cash transactions and promote digital payments. However, IRD has said that vendors should first link themselves with payment solution providers and the Integrated Tax System of the government. As of now, the 10 per cent VAT rebate will be applicable only for transactions made through operators and vendors linked to the government’s integrated tax system, as per Kunwar. “Banks and financial institutions, vendors and payment service providers are increasingly linking themselves with the new integrated tax system of the government,” he said, adding that any form of electronic payment made by consumers within the set limit will be rebated 10 per cent of the VAT amount immediately in his or her bank account. To avail this facility, the purchaser should have acquired the permanent account number from the government and that the VAT is applicable on the goods they have purchased.